There’s no shortage of discussion about rising living costs — but far less clarity about where those increases are happening and what’s driving them. While the Twin Cities remain the most expensive place to live in Minnesota, recent increases have been hitting rural counties harder and faster.

Using county-level cost of living estimates from the Minnesota Department of Employment and Economic Development (DEED), this post looks at how costs vary across the state, how they’ve changed since 2018, and which expenses are putting the most pressure on household budgets.

 

About the data

DEED’s cost of living tool estimates the monthly cost of meeting basic needs for households in each Minnesota county. While any model has limitations, it provides a consistent baseline for comparing regions and tracking trends over time.

Costs are estimated across seven categories: child care, food, health care, housing, taxes, transportation, and other basic expenses. A full description of DEED’s methodology is available here.

 

Most Recent Cost of Living

To compare costs across counties, this analysis uses a household of four: two full-time working adults and two children under age five.

Map 1 shows the hourly wage required in 2024 to meet basic living costs under those assumptions. Required wages are lowest across much of western Minnesota (between $15 and $20 per hour), increase in northeast and southeast counties ($20 to $22.50 per hour), and peak sharply in the seven-county Twin Cities metro, where households need more than $25 per hour to cover basic expenses.

Map 1: The hourly wages for both adults working full-time required to meet the cost of living across Minnesota. Data: MN DEED (Cost of Living Calculator)

 

What cost of living factors have the largest differences? Well, not all cost categories vary much across the state. Monthly food and health care costs differ by less than $100 county-to-county, and “other” basic expenses show moderate variation.

The largest differences come from four categories: housing, child care, transportation, and taxes — with housing by far the dominant factor.

Housing is the single largest source of geographic cost differences in Minnesota. As shown in Map 2, estimated monthly housing costs range from about $1,100 in parts of Greater Minnesota to more than $2,250 across the seven-county metro — a difference of over $1,000 per month.

Map 2: Monthly housing costs are significantly lower outside the seven-county metropolitan area. Data: MN DEED (Cost of Living Calculator)

 

The other categories with the largest cost differences are; child care where much of greater Minnesota ranges from $785 to $1,200 a month to a significant jump in the metropolitan areas of the state where child care costs $1,500 to $2,000, and; taxes, where much of greater Minnesota ranges from $555 to to $1,000 while the seven-county metro is closer to $1,500 per month.

Transportation is the one major category where costs are often higher in Greater Minnesota than in the metro. As shown in Map 3, counties west and north of the Twin Cities face higher transportation costs, reflecting longer commutes and greater distances to essential services like groceries, child care, and health care.

Map 3: The monthly estimated costs of transportation is significantly higher throughout Greater Minnesota compared to the seven-county metropolitan area. Data: MN DEED (Cost of Living)

 

The Rise of Cost of Living

While the Twin Cities remain the most expensive region overall, recent increases in the cost of living have been steeper in much of Greater Minnesota — and the data confirms that perception.

Since 2018, most counties outside the metro have seen cost-of-living increases exceeding 20%, with several above 30%. In contrast, the seven-county metro has generally experienced increases between 10% and 20%.

Map 4: The largest increases in the cost of living since 2018 to 2024 has occurred throughout rural areas of Minnesota. Data: MN DEED (Cost of Living)

 

The counties with the highest increases in their cost of living are;

1. Freeborn – 39%
2. Stevens – 35%
3. Houston – 35%
4. Lake – 34%
5. Mower – 34%

So which categories increased the most? Chart 5 shows which cost categories experienced the largest increases between 2018 and 2024, measured both in dollars and percentage change. Across Minnesota, three categories dominate: housing, child care, and transportation — though the leading driver varies by county.

Map 5: The largest change in cost of living categories varies across Minnesota. Data: MN DEED (Cost of Living Calculator)

 

Let’s examine a couple counties that were in the list of top 5 counties with the highest increases in the cost of living – Stevens County illustrates how housing-driven increases can rapidly reshape rural affordability, and; Lake County which highlights the growing role of transportation costs in more remote parts of the state.

Table 1 shows the change in each category for Stevens County. The largest percentage and dollar change occurred in housing. Since 2018, the monthly cost for housing has increased by 58%, or $516 per month.

Table 1: The cost of living category with the largest percent and dollar change in Stevens County is housing. Data: MN DEED (Cost of Living Calculator)

 

Table 2 shows the change in each category for Lake County. The largest percentage increase in the cost of living categories is transportation which grew by 57% ($468 increase) since 2018 while the largest dollar increase was in housing which increased by $483 (46% increase).

Table 2: In Lake County the cost of living category with the largest percent change is transportation while the category with the largest dollar change is housing. Data: MN DEED (Cost of Living Calculator)

 

There’s no question that the cost of living remains highest in the Twin Cities. But since 2018, the fastest increases have occurred across Greater Minnesota — driven not by a single expense, but by simultaneous increases in housing, transportation, child care, and taxes.

These are not discretionary costs. They are the basic requirements of daily life. As a result, households across the state are being forced to absorb higher fixed expenses by cutting back elsewhere, regardless of whether they live in the metro or rural Minnesota. Understanding where and why these pressures are growing is essential for shaping housing, transportation, and workforce policy in the years ahead.

While this analysis shows that cost increases are rising faster in much of Greater Minnesota, it does not fully explain why these increases are occurring. Housing shortages, longer travel distances, limited child care availability, aging infrastructure, constrained local labor markets, and data collection may all play a role — but the relative importance of these factors likely varies by region. More detailed, place-based research is needed to better understand the structural drivers behind these trends and to distinguish between temporary price shocks and longer-term affordability challenges. Without that deeper understanding, policies risk addressing symptoms rather than the underlying conditions driving higher costs in rural communities.